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League tables cannot make sense of a complex picture

September 2008

By all means compare company behaviour, but we must avoid over-simplified rankings, says Julia King.

GlaxoSmithKline (GSK), the company I work for, recently came top in a new pharmaceutical industry ranking – The Access to Medicine Index (see page ten). Of course I am very pleased. It is testament to the efforts of many GSK employees executing our commitment to help address the healthcare challenges of the developing world in a sustainable way, making our vaccines and medicines more widely available.

Gratifying though this is, however, our rejoicing has been muted. My main conclusion is that the corporate responsibility world may need to rethink its approach to assessing performance – in every industry, not just pharmaceuticals. There has been a widespread assumption that if only companies produced good enough information it would be possible to make simple comparisons of performance. But it seems to me that this really is a holy grail, meaning it is unattainable.

On the face of it, it looks quite easy to develop a ranking showing how a smallish group of quite similar companies is performing on a specific aspect of corporate responsibility. What’s more, the Access index had the benefit of stakeholder input and the expertise of the analysts Innovest. Despite all that, the methodology has been seriously questioned – and not just by those who came lower than they would have liked. Access to medicines has many facets, including researching what are known as ‘neglected diseases’, preferential pricing and licensing strategies, drug donations and support for healthcare infrastructure. Scoring these different aspects is problematic, to say the least. When you apply a common set of criteria to such a complex issue and very different companies, it is clear that one size does not fit all.

Isn’t this the same for just about any aspect of corporate responsibility in just about any industry? How should we rank the climate performance of banks, for example? Clearly not just on emissions from their own operations. But how to factor in the climate impact of lending, investments and advisory work? The same goes for supply chain performance – you can add together code infringements and other data that companies can divulge, but that’s unlikely to tell you which company is doing most to improve working conditions.

This is absolutely not an argument against transparency. GSK will continue to publish extensive data, as I am sure other companies will. Rather, this is an argument for avoiding excessive expectations arising from the comparisons and rankings that such data will support.

Data is important in corporate responsibility as in every aspect of business. But performance is largely qualitative – about how well you do things as well as how much you do. Comparing performance must be based on judgements more than measurements. So while I welcome efforts to make comparisons easier, I don’t want to see the complexities of responsible behaviour reduced to simple tables – even when GSK comes out on top!

Julia King is vice president of corporate responsibility at GlaxoSmithKline.